Impact of policy mix concerning renewable portfolio standards and emissions trading on electricity market

Xiongjiantao Bao, Wenhui Zhao, Xiaomei Wang and Zhongfu Tan

Renewable Energy, 2019, vol. 135, issue C, 761-774

Abstract: Few studies of policy mix concerning renewable portfolio standards (RPS) and emissions trading (ET) investigate a scenario in which the retailer is required to comply with quota obligations. This paper focuses on the impact of RPS, with an ET counterpart, on the electricity market when RPS are imposed on the state grid companies. The evolution game is employed to model transactions between multiple buyers and multiple sellers. The results show that ET enhances the price competitiveness of electricity from renewable energy source (RES-E) and reduces power generating companies’ profit at the same time. On the other hand, when the RPS level goes up, the state grid companies gain a windfall created by the difference between the lower wholesale price of thermal power and the unchanging retail price. The windfall will be used to pay for the increasing cost of supporting RES-E. Thus, the thermal power generating companies are confronted with the double cost when introducing ET and RPS, but the state grid companies do not pay for the cost of supporting RES-E. This paper appeals to the Chinese government for the assessment of policy effects from a policy mix perspective.

Keywords: Renewable portfolio standards; Emissions trading; Policy mix; Evolution game (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S096014811831437X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:135:y:2019:i:c:p:761-774

DOI: 10.1016/j.renene.2018.12.005

Access Statistics for this article

Renewable Energy is currently edited by Soteris A. Kalogirou and Paul Christodoulides

More articles in Renewable Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().